Avanti Feeds Targets 5.85 Lakh MT Feed Sales, 19,000 MT Shrimp Exports, ₹175 Crore CAPEX

Market snapshot: Avanti Feeds has outlined an ambitious expansion and diversification plan for FY27, guiding for 5.85 lakh MT in feed sales and approximately 19,000 MT in shrimp exports. To tap into non-cyclical growth, the company is committing ₹175 crore toward a pet food manufacturing plant near Hyderabad. However, despite strong volume growth, rising input cost inflation continues to weigh heavily on near-term margins.

Data Snapshot

• Avanti Feeds has guided for a feed sales volume target of 5.85 lakh MT in FY27.
• The company expects shrimp export volumes to reach approximately 19,000 MT in FY27.
• Management has allocated a planned CAPEX of ₹175 crore for its pet food manufacturing plant near Hyderabad, with ₹25 crore utilized for land.

What's Changed

• Consolidated revenue from operations grew by 18.3% YoY to ₹1,899.86 crore in Q1 FY27 from ₹1,606.36 crore in Q1 FY26.
• Consolidated net profit (PAT) fell 37.4% YoY to ₹116.31 crore from ₹185.68 crore due to raw material cost pressure.
• Consolidated EBITDA margin contracted by 750 basis points, dropping to 9.0% from 16.5% a year ago.
• Fish meal consumption price rose to ₹153 per kg in Q1 FY27 from ₹93 per kg in Q1 FY26.
• Soybean meal prices surged to ₹58 per kg in Q1 FY27 from ₹40 per kg in Q1 FY26.

Key Takeaways

• Volume trajectory remains robust, with Q1 FY27 shrimp feed sales volumes rising 17% YoY to 193,852 MT, signaling steady downstream farming demand.
• Diversification into the domestic pet food business under Avanti Pet Care is progressing with land acquired near Hyderabad.
• Margins are severely squeezed by input price inflation, particularly for fish meal (+64.5% YoY) and soybean meal (+45.0% YoY).
• Proactive measures include a ~10% feed price hike implemented on June 19, 2026, and formulation adjustments to hedge against input cost swings.

SAHI Perspective

Avanti Feeds is managing a dual narrative: robust volume execution countered by deep raw material margin pressure. Setting targets of 5.85 lakh MT feed sales and 19,000 MT exports reinforces its market leadership. The crucial variable for profitability is whether the June 2026 price hike and feed reformulations can offset the severe inflation in fish meal and soybean meal. The ₹175 crore pet food project is a structurally positive step to build a non-aqua consumer engine, which will help reduce cyclicality over the medium-to-long term.

Market Implications

The volume guidance of 5.85 lakh MT represents an annualized growth of 5% to 6%, while shrimp export goals mark progress over FY26's 16,976 MT. The ₹175 crore pet food CAPEX positions the company well in a high-growth domestic niche. However, immediate stock performance will likely remain range-bound until EBITDA margins show recovery from the current 9% level toward historical double-digit norms.

Trading Signals

Market Bias: Neutral

While volume guidance and the ₹175 crore pet food diversification are long-term positives, the sharp EBITDA margin contraction to 9% from 16.5% in Q1 FY27 keeps the near-term bias neutral.

Overweight: Aquaculture Feed Manufacturers, Seafood Processors

Trigger Factors:

• Softening of key raw material inputs (fish meal falling below ₹120 per kg)
• Margin recovery in subsequent quarters following the 10% feed price hike
• Timely execution and commissioning of the Hyderabad pet food facility

Time Horizon: Medium-term (3-12 months)

Industry Context

The Indian aquaculture industry is navigating high cost inflation and global export tariff challenges. Key feed inputs like fish meal and soy meal have surged by 64.5% and 45.0% YoY respectively. Despite this, India remains a global powerhouse in shrimp exports. Simultaneously, the Indian pet food market is booming, growing at a rapid CAGR, making Avanti's ₹175 crore diversification highly strategic.

Key Risks to Watch

• Continued inflation in fish meal and soybean meal could push margins down further.
• Trade tariffs or regulatory hurdles in primary export markets like the US.
• Execution delays in setting up the Hyderabad pet food facility beyond FY27.

Recent Developments

Avanti Feeds released its Q1 FY27 earnings call transcript on August 28, 2026, confirming a 37.4% YoY PAT decline to ₹116.31 crore. On June 19, 2026, the company implemented a 10% feed price hike to combat rising raw material costs.

Closing Insight

Avanti Feeds' transition into a diversified animal and pet food player is structurally sound. Supported by a debt-free balance sheet and strong cash reserves, the company is fully capable of funding its ₹175 crore pet food CAPEX through internal accruals. While near-term margins are compressed, the long-term growth story remains intact.

High Performance Trading with SAHI.